Inigo Bridle shares his experiences from numerous S&OP implementations, analysing the People, Process and System changes that were required to make them successful.
Changing business processes
If an organisation is mature enough to have realised the value of implementing S&OP to maximise the profitability of the business, then it probable that this journey has started by creating the supporting organisation within the business. This is often a new function with a clear set of goals to achieve. These goals will be to create the business processes to operate in a new way and begin to review the supporting IT infrastructure. The new organisation will be seen as a separate function by the rest of the business who will be continuing to operate in the ‘old’ way until the behavioural change begins. Once the new organisation has been constructed and the S&OP process design completed, there is often a period where the new processes are explained to the existing business, and a organisational change process would commence. This change could also be accompanied by IT implementation but more often than not, the IT solution decision is later in the timeline.
Changing hearts and minds
The organisation is now at a point where the S&OP processes are defined and with some goodwill from all parties, the organisation can now start to have a complete business-based outlook, rather than just for individual markets or operational units. However, this is only possible with the acceptance of the changes by the whole organisation. This leads us to the second part of the question, peoples’ behaviour.
Peoples’ behaviour towards change is a huge area of research and generates many articles, publications and much discussion. There is always resistance to change within organisations even by the people who say they ‘like change’. The skill in any implementation is to manage the change by providing the correct leadership. The leadership must understand that an individuals perspective of the changes that is occurring, are the rational viewpoint of that person. There may be many ideas generated through this change process that can significantly improve the final process, so they should never be ignored. The pace of behaviour change can only proceed at the speed of the person who is slowest to adopt the change. This situation can lead to frustration for the change implementers and the complete organisation if not addressed in a timely manner.
Changing the IT landscape
Let us now consider that the organisation has made great progress on its journey to a fully implemented S&OP process. The business processes are operational, and the people are fully supportive of the new processes and are working in news ways to move to a more holistic understanding of the organisation. As time progresses it becomes clear that the existing IT infrastructure is blocking the ability of the organisation to make the next step in a full understanding of it’s profitability. It might be that the level of granularity is not enough, or the operational agility to adapt to a changing market demand is to slow to maximise opportunities. It is likely the organisation has many IT systems providing various useful information to support the S&OP process, but one single S&OP system is required to bring all business functions into alignment. Now the time has come to make the change to the supporting IT.
It is another change management project to implement a new system, create the interfaces to the existing systems, train the system users in the new ways of working whilst minimising the impact to the established and understood business processes. If these steps can be achieved without major disruption to the existing business operations, then the supporting IT implementation will a success. The best implementations result in better business profitability for the minimum disruption to the business operations. These occur where the processes are well defined, and are followed by people who not only understand the rationale behind the processes, but see the value to themselves and to the business, of improving their daily tasks with a more suitable IT system.
To summarise, the answer to the question in the title is clearly all three!
Each needs to be carefully considered from a holistic view, considering the impact each in turn will have in the adoption process, through a carefully thought through implementation timeline. This is fundamental to taking the next step to become a mature S&OP organisation.